What are the guarantee forms for international financing
Guarantee
Is the agreement reached between the guarantor and the borrower and the lender in the loan agreement regarding the failure of the guaranteed party to perform or the An agreement in which the guarantor shall perform the performance on his behalf or jointly and severally bear liability for losses when the agreement cannot be performed. In banking business, this kind of guarantee contract is called a letter of guarantee, that is, the bank issues a bank guarantee to the creditor or other beneficiary for its client.
Comfort letter
It is a written document issued by the government or the parent company to the lender for the loan of the subordinate institution or the loan of the subsidiary company, indicating that it is willing to help the borrower repay the loan. The comfort letter was originally intended to circumvent some countries' regulations on parent companies' taxation of subsidiary loans guaranteed. Consolations are generally not legally binding, but only morally binding.
Standby letter of credit
It is a loan issued by the guarantor (issuing bank) at the request of the borrower A payment voucher issued by a person is a special form of letter of credit and a derivative of letter of credit. It is a disguised guarantee created by U.S. banks to circumvent U.S. federal laws prohibiting banks from providing guarantees to their customers. When the lender presents the certificate to the guarantor, the guarantor must pay the amount stipulated in the certificate. A standby letter of credit is actually a commitment by the guarantor to the lender based on its own credit to assume responsibility for the borrower's performance of the debt. International rules regarding standby letters of credit include the International Chamber of Commerce's 1993 Uniform Customs and Practice for Documentary Credits (UCP500) and the International Chamber of Commerce's 1998 "International Standby Letters of Credit Practice" (ISP98).
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